If – like many of the clients I work with – you are an established enterprise software company, it’s likely that your initial success will have been based on selling a perpetually licensed on-premise solution.
And even if you’ve developed a new cloud-based version of your application, it’s likely that many of your customers will still be running on your older on-premise platform. You probably want to move them on to your new solution.
But what’s the best way of achieving this? The natural inclination of most technology-based businesses is to sell the advanced capabilities of their shiny new solution.
But some compelling recent research has concluded that this is a potentially costly mistake…
The research was conducted by Corporate Visions and Dr. Nick Lee of Warwick Business School and published in the International Journal of Sales Transformation. You can download the research brief here.
Without the benefit of the research, you might initially be tempted to position your new cloud-based platform as a “better” solution. But in many cases, it’s also going to be a “different” solution – one that will involve a certain amount of disruption.
Some sort of migration is probably going to be necessary to move from the old platform to the new one. You’ll probably offer to hold your customer’s hand during the transition. But it may involve inevitable disruption, which you’ll probably seek to minimise.
Your customers may be satisfied with their existing solution. They may feel that they are being pressured to move – and if they do, and if they feel that disruption is inevitable anyway, they may well take the opportunity to evaluate alternative competitive solutions.
If they weren’t already looking outside, this probably isn’t something that you want to encourage them to do. So your “why migrate” message needs to be delivered with at the right time, with particular care, and in a specific sequence.
But before we turn to the conclusions of the research, it’s vital to stress the importance of understanding how your customer is using your current solution today, and the business benefits they are achieving.
The customer’s situation
This should be obvious, but it is somewhat distressing to see how many installed base account managers don’t understand at any level of detail how their customers are actually using the existing solution.
Even more significant, they are often regrettably ignorant of the business benefits their customer is deriving, or what their current corporate priorities and initiatives are, or how these priorities and initiatives might have evolved since they first installed your solution.
This ignorance can also extend to what’s going on in the customer’s markets – for example how competition, legislation and regulation is changing the industry dynamic, and how key trends are affecting the customer’s position.
We need to do our research first. We need to know all of the above factors, and more. Before promoting the idea of a migration, we need to make sure that our story is relevant to our customer and based on a solid foundation.
5 different message scenarios
The research tested 5 different message scenarios and sequences: respectively promoting the “product as hero”, the strength of the relationship, “why change?”, “why stay?” and the use of peer pressure/social influence.
The test involved a statistically significant simulation involving over 400 business-to-business decision makers. All the participants were asked to imagine that they were engaged in a dialogue with a sales person from their existing vendor, who was seeking to persuade them to upgrade from a legacy on-premise application to a new cloud-based solution.
It’s a situation faced by many established enterprise-focused B2B software companies, and for many their natural inclination is to take a “product as hero” approach and to promote the virtues and capabilities of their shiny new solution. If you are in this position, it may be an approach that you recognise.
So here’s something that may surprise many tech-based businesses: the “product as hero” message turned out to be amongst the least successful strategies. The relationship-based message sequence proved to be 5-16% more effective across a range of significant metrics.
The winning sequence
But the relationship-led “why migrate” message needs to be delivered in a particular sequence. Drawing on both Corporate Vision’s research, and my own projects with a cross-section of clients who are involved in complex B2B sales, here’s my recommendation for a successful migration story-arc.
Step 0: Preparation
You must do your research first. It’s critically important that you understand not only how your customer is currently using the product, but also how their circumstances and priorities have and are changing in response to changes in both their internal and external environment.
Step 1: Summarise what you’ve achieved together
Remind them of the quantifiable business benefits they have achieved as a result of using your solution – and reaffirm that they made a great choice when deciding to work with you in the first place.
Step 2: The world has moved on
Refer to new trends and issues, show them how and why they are making traditional approaches and solutions increasingly inadequate – and explain how you have invested heavily to re-platform your solution in response to these trends.
Step 3: Implications for their business
Highlight the implications of these trends on their business in your role as their trusted adviser – and suggest that even if they have not yet already done so, they will also conclude that change is inevitable.
Step 4: The risks of not changing
Emphasise the increasingly harmful risks to their business of ignoring these trends, sticking with the status quo and refusing to change – and reinforce why we believe there is an increasingly compelling case for change.
Step 5: The potential for gain
Conclude by helping them to recognise the benefits to their business of all our new features and capabilities – and explain how we plan to make it as easy as possible for them to take advantage.
This is a very different story-arc from the traditional “you’re going to love our better product” approach. It anchors the story in the unarguable changes that are happening both within the customer and in the markets they serve, and it explains how and why we are acting in their best interests.
Making it easy
Some of the ways in which you can make the migration easier include minimising the economic impact in the first year – if you can find a way of funding the move through what they are already paying in maintenance, etc., for their existing system it can make the decision that much easier to make.
No matter how brilliant your new generation solution, taking this relationship-based approach to the migration message is likely to have a statistically significant impact on the success of your migration efforts.
Your customers made a great choice when they first chose your solution. But as they must surely acknowledge, the world has moved on since then. And now, with your help, they can equip themselves for the future and preserve a valuable relationship.
If you want to find out more about the original research and keep track of other related developments, I recommend that you visit the Corporate Visions website, follow Dr. Nick Lee and subscribe to the International Journal of Sales Transformation.